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More than 145,000 sq m of space will be created in 2012 alone. Of that, 57 per cent is already committed.

Jennifer Cunich
, the council’s executive director, said industry sentiment had turned negative in the face of the poor global outlook and a finance squeeze.

“The Victorian government has a major leadership role to play in facilitating business opportunities," Ms Cunich said.

CBRE research head Kevin Stanley also noted the expansion of occupied space was much slower than in previous years.

“It’s likely Melbourne is also starting to feel the ill winds of the global financial storm and this is leading to hesitation in corporate commitment," he said.

Jones Lang LaSalle’s state leasing head, Stuart Colquhoun, said there was a lack of large contiguous tenancy options across the different Melbourne office markets.

“As a result, there are a number of pre-commitment requirements that are yet to be satisfied," he said.

“These pre-commitments should reach agreement in 2012 and prompt further project commencements."

Colliers national leasing director, Andrew Tracey, said rents had evened out in the second half of 2011 after strong growth in the first half.

“We expect face rents to remain consistent throughout 2012 and incentives to continue to play an important role in tenants’ decisions to relocate," he said.

Savills’ state leasing head, Nick Farley, was also cautious in his outlook, noting that most tenant moves in 2011 had been largely through organic growth rather than optimistic expectations of business activity.

Mr Farley reckoned that trend would continue in the first quarter this year. “The strong fundamentals of the Melbourne market – its diversity, the low vacancy rate and the lack of new space coming on line – should help the market to maintain a relatively healthy performance given those negative external influences."

Global uncertainty and staff cuts expected in the finance sector would slow any rental growth. But the lack of contiguous space for big tenants would help put a floor under rent levels, he said.